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Transfer of
Shares
In the context of transferring unquoted securities within an unlisted entity, there exists a regulatory requirement necessitating the involvement of a merchant banker to ascertain the fair valuation.
This valuation process is guided by the provisions set forth in Section 50CA and 56(2)(x) of the Income Tax Act, 1961. The detailed methodology and procedural framework for this valuation exercise are specified within Rule 11UAA.
Provisions for Unlisted Companies
Compliance with Income Tax Act 1961
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Governed by Section 56(2)(x) and 50CA of the Income Tax Act, 1961, read with applicable rules.
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Valuation Certificate requirement: An unlisted company must obtain a valuation certificate from a Category 1 Merchant Banker registered with SEBI.
Provisions for Listed Companies
Compliance with Income Tax Act 1961
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Governed by Rule 11UA of the Income Rules 1962.
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Valuation Certificate requirement; There is no valuation requirement, when securities are being Transferred d by a Listed company, under Income Tax.
Key Points to Consider
01
Which is the governing law for Unlisted
Income Tax Act 1961
02
Which is the governing law for listed
Not Applicable
03
Who does the Valuation
Merchant Banker
04
When valuation is required
At the time of Transfer of securities
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